U.S. Customs considers combining C-TPAT, ISA

Thursday, May 24, 2012

U.S. Customs is studying the possibility of merging the Customs-Trade Partnership Against Terrorism and the Importer Self-Assessment into a single trusted trader program with enhanced benefits to attract greater voluntary participation from companies, Acting Commissioner David Aguilar told a House panel last week.
Both industry partnership programs have been plagued by low turnout, although C-TPAT has about 10,250 members. A year ago, then-Commissioner Alan Bersin set a goal of increasing the program's membership to 40,000 firms (from 10,083) within five to seven years.
C-TPAT is a security program that places responsibility on shippers and their suppliers to keep contraband and terrorist weapons out of import containers so that Customs and Border Protection doesn't have to spend resources checking cargo about which it has a high-level of confidence and can focus inspections on cargo from unknown or suspicious sources. Shippers that implement approved security plans for their international supply chains are certified and their cargo on average is five to seven times less likely to receive a non-intrusive imaging exam, depending on the tier of security they have achieved.
Under the Importer Self-Assessment (ISA), importers that prove they have strong internal controls are allowed to monitor their compliance with trade regulations in return for fewer Customs audits. The decade-old program only has 231 approved companies, up from 206 last year.
Trade professionals say that ISA's requirements are too burdensome for most companies given limited benefits.
Similar complaints have been lodged against C-TPAT. Some importers also say advertised perks, like moving to the front-of-the-line when cargo is selected for an X-ray exam, fail to materialize. Subscription levels and surveys indicate greater satisfaction with the program than ISA, especially in reducing delays and indirectly improving operations by forcing companies to gain better control of their supply chains.
CBP officials are giving serious consideration to having a single trusted shipper program and working with industry to identify other benefits for traders that invest in management programs to ensure compliance with security criteria and regulatory requirements, Aguilar testified before the House Ways and Means subcommittee on trade.
The agency hopes to offer some new incentives within two to three months, he said.
In a brief interview following his testimony, Aguilar acknowledged that CBP was moving toward the model of the European Union's Authorized Economic Operator program, which offers companies three types of certification for meeting trade standards. One part of the program offers simplified customs procedures to companies that have a strong track record of customs compliance, financial stability and record keeping. Another component offers trade facilitation benefits to companies with adequate security and safety controls for shipments. Full certification is available for companies that are willing and able to meet all the standards.
Aguilar aide Maria Louisa O'Connell, said a unified trusted shipper program would be tested with industry partners to make sure any proposed benefits make sense for businesses and can be effectively implemented in the field by CBP. The agency also wants input on whether there is interest in companies being able to opt out of the security or regulatory side of the program and obtain a partial certification similar to the way it is done in the EU, the commissioner added.
Having similar U.S. and EU industry partnership programs could prove helpful to international firms because the programs eventually could be aligned to streamline redundant requirements.
That process is already underway on the security side with this month's signing of a U.S.-EU agreement to mutually recognize each other's supply chain security programs so that shippers validated by one customs authority will receive trade benefits in the other's territory without having to go through a separate application process.
A lingering hitch in such collaboration is that C-TPAT is only geared towards imports, while the AEO program covers imports and exports. EU customs authorities pre-check companies within their borders and share the information, but don't send teams to check an importer's supply chain arrangements in foreign countries as CBP does. European companies that import goods from the United States won't be eligible for expedited clearance unless the U.S. government grades registered domestic companies on their security practices.

After a couple years slowly entertaining the idea of expanding C-TPAT to the export realm, CBP officials have now embraced the idea.
"Our eventual interest with C-TPAT is both import and export," Aguilar said outside the hearing room.
CBP this month began a C-TPAT export pilot program with several companies, Shawn Beddows, the acting C-TPAT program director, said Tuesday while briefing the agency's Commercial Operations Advisory Committee at a quarterly meeting in Savannah, Ga. Supply chain specialists visited each of the companies to audit their security systems for facilities, personnel, containers, IT and access to the premises. The criteria for evaluating exporters were the same as security criteria used on the import side, along with how companies followed requirements for properly shipping items with dual military-commercial uses or that require an export license, he said.
A big part of making a C-TPAT export component viable, Aguilar said, is integrating export functionality into the Automated Commercial Environment currently being developed as the agency's main trade processing and communication system. CBP has reassigned $4 million from other accounts to ACE to create an export module and hopes to get more money in the 2013 fiscal year appropriation, he said.
The Ways and Means Committee is developing legislation to reauthorize CBP activities, with particular focus on changes that can increase trade compliance while reducing red tape. - Eric Kulisch